Use any weakness in the stock markets – something we have plenty of lately – to buy the stuff you regret you didn’t pick up when the markets plunged early this year.

Major Canadian and U.S. stock indexes have turned in four losing weeks in a row. The view of some market watchers is that we could either float sideways or see more declines ahead, and then experience some gains later in the year.

"From current levels, we believe the probability of equities outperforming bonds and cash through December 2010 remains very high," Vincent Delisle, strategist with Scotia Capital, wrote in a report yesterday.

Summer is traditionally a rainy season for stocks. According to a handy guide to seasonal investing trends called Thackray’s 2009 Investor’s Guide, all the major North American stock indexes were down on average in both July and August during the period from 1998 through 2007.

Remember summer 2007? That was when the global financial crisis started to bite. Bank stocks plunged and a kind of investment called asset-backed commercial paper (ABCP) emerged as its first victim.

Last summer, the markets peaked in early June and then began a slow fade that turned cataclysmic in September.

In another commentary issued yesterday, technical analysts Ron Meisels and David Tippin said they have looked at their charts showing market volume and price moves and concluded that stocks will likely stumble.

They see the major indexes hitting a low in late August and early September, with Canada outperforming the U.S. market.

The question all squeamish investors have to be asking themselves is whether the indexes will plunge to the lows reached in March.

Messrs. Meisels and Tippin warn there will be a lot of anxiety about those lows being retested if the markets fall hard in the next while.

"However, a more likely scenario is a one-third or one-half retracement of the March-June advances and that the markets will find support well above the panic levels seen in early March," they wrote.

The market lows of March could turn out to have been the best buying opportunity some investors will ever see. The problem is in seizing such moments. It simply can’t be done by many people because they’re too unnerved.

This explains why there’s about $70-billion sitting in money market funds right now doing pretty much nothing, thanks to low interest rates.

Money-market-fund investors are afraid the stock market will fall again and that’s a legitimate concern.

The major indexes have dropped in the area of 10 per cent from their recent highs – one measure of a market correction.

Scotia Capital’s Mr. Delisle tried to put some perspective on this recent weakness by pointing out that the S&P/TSX composite index and S&P 500 stock index are up about 30 per cent from their lows in March, even after the pullback.

He doesn’t see much risk that the S&P 500 will drop much further, while the S&P/TSX composite could have another 3 to 5 per cent to fall. As for the reason that stocks are falling, Mr. Delisle sees it as being more of a breather than a symptom of a worsening economy.

Would further stock market declines be a good opportunity for those who missed out in March?

"I don’t like the term missing out – if people are trying to catch a rally, it becomes a pointless game," Mr. Delisle said.

"But for investors who didn’t take advantage of the chance to recalibrate portfolios – lower cash, lower bonds, add more cyclicals – this is an opportunity."

Here’s how to prepare: Start a list of the stocks, exchange-traded funds or mutual funds you want to own and get ready to buy.

Mr. Delisle said three sectors that would benefit from an economic rebound are life insurance companies, industrials, and oil and mining companies (see chart for more details).

Don’t obsess about getting in at the exact bottom for a particular stock or fund. Instead, think about averaging in, which means making a few staggered purchases so as to benefit if prices keep falling.

You also protect yourself against the risk of making a big buy and then watching the market tank.

Yes, the markets may tank this summer or in the fall. The possibility can’t be discounted, so be prepared for it to take one or two years to see some real benefit from money committed today.

Investing will be a slog for the next while, but that doesn’t mean it’s not the right strategy to stock up right now

1.    Assess risk. Identify what activities are outsourced, moved between different groups, and transferred across borders, and which activities are performed by the board of directors, top managers, employees, suppliers, customers, competitors and external contractors. Recognizing risk spots determines where prevention and detection mechanisms should be placed.

2.    Assess corporate culture. Identify the ethical tone of the organization and pressure points that may motivate employees to cross the line. Employees who are unclear of the firm’s ethical expectations may find it easier to rationalize fraudulent behavior.

3.    Know who you hire. Contact references and verify educational backgrounds of potential employees before hiring them. Conduct criminal and financial background checks on prospective employees who are under consideration for financially sensitive positions.

4.    Create an ownership environment. Employees who act and feel like owners of the company are generally less likely to steal. A culture of ownership promotes shared responsibility of company successes and failures and a more committed workforce.

5.    Take away temptation.  From a security standpoint, organizations should perform regular ethical and social hacking to make sure Internet access and systems controls are secure. Internal auditors should be charged with ensuring the effectiveness of the organization’s internal controls.

6.    Keep employees informed.  Make sure employees know and understand new policies and procedures. Annual organization-wide ethics training helps to ensure that a consistent message is delivered to all employees. Most organizations find that a strong ethical environment encourages self-policing, thereby increasing the level of oversight far beyond what internal control methods alone provide.

7.    Set up a hotline. According to the ACFE, at least 60 percent of all fraud is uncovered because of employee tips. Establish an anonymous reporting hotline that employees can use if they know or suspect fraud. When a call comes in, act quickly to confirm the validity of the call and take action if necessary.

8.    Establish detection mechanisms. Executives should use a combination of internal audits, surprise audits and senior management reviews to help ensure that the right questions are being asked and answered at every level. This oversight should also be extended to remote locations.

9.    Implement checks and balances. While most fraud occurs in the non-management ranks, fraud by executives and managers often is more costly. Create an advisory committee to provide oversight at all levels. When people know they are being watched, they’re less likely to steal.

10.    Take action. If fraud is detected, implement a rapid-response plan with strategies for investigating, reporting and prosecuting misconduct, fraud or corruption. Follow-up procedures are critical to ensuring that questionable behavior is not overlooked. Then put controls into place to prevent this specific type of fraud from happening again.

Accounting firm Crowe Horwath LLP has advice on the top 10 ways that corporations can reduce occupational fraud by WebCPA

You wouldn’t be an entrepreneur if you didn’t have vision, were afraid to take risks or prepared to let things stay the way they are. So why start now? The world may be in economic crisis, but one man’s problem is another man’s opportunity.

Whether business booming or you’re feeling the pinch just like everyone else, a small business owner should always be on the look-out for ways to improve his business. Here are a few ideas to get you thinking, so get out that notebook.

Back to basics: You may have to dig deep in your filing cabinet, but take a look at your original business plan. Remind yourself of your vision for the company and compare it to where you are now. What has changed or what needs to be changed?

Look ahead: No matter how bad yesterday was, today is a new day and an opportunity to start afresh. Don’t dwell on the mistakes or problems, but rather on what you learnt from the mistake and how you are going to solve the problem. Focus on today and you won’t waste precious time and energy cursing yesterday.

Ideas, ideas, ideas: Sit down in a quiet place or get your employees into the office and start brainstorming. List potential projects you could take on, ways to expand service offerings, how to re-energise the business, and so on. Do you need to take the business online or explore new markets? Then put together a strategy to put these thoughts into action.

Have a back-up plan: Work through potential worst case scenarios in various areas of your business and what you would do if it happened. Knowing what plan B is, could mean the difference between a technical glitch or a complete operational shutdown. "Crossing that bridge" when you get there is probably not the best expression for doing good business.

The customer knows best: Contact your customers and hear what they have to say about your business, the service they’re getting and what they would like to see. Don’t be afraid of negative comments either. These are often the best fertilizer for new ideas. Think about ways to encourage or reward customers for introducing you to new clients. Could you expand your customer base to include a different segment of the market, perhaps?

Where is the money going? Do you spend money only where it’s necessary? Are there ways you can save costs? This does not mean you have to start laying people off. There is more than one way to kill a cat and implementing the simplest measures at work can end up saving a good chunk of money.

Is cash coming in? Also look at where the money is coming from and how to keep cash flowing into the business. Ask your debtors for sureties that they are able to pay, shorten credit periods or hold less stock. Make sure there is always money in the bank.

Are your operations up to scratch? Look objectively at the way you are running your business. Are there areas for improvement? Maybe you’ve been cutting corners where you shouldn’t? Now is the time to get everything on track and above board. Any weakness can also be pinpointed and improved on. Get professional advice if necessary.

Measure your performance: If you haven’t already done so, set clear time-bound goals for each of your projects or tasks. Allocate time frames for when you will measure these to see if you are meeting your goals or if you need a contingency plan. Review your goals regularly and set new objectives once current targets have been achieved.

Check out the competition: Always know what your competitors are up to. Have they lowered their prices or introduced a new product line? Who knows, they might even be ways to work together so you both can stay afloat or concentrate on a specific section of the market.

Start looking after yourself: You are helping no one by burning out, so take the time to have some fun, spend quality time with your family or go on a much-deserved break. You’ll feel more creative and energized to face whatever comes your way!

We may not have listed all the possibilities for getting your business out of a rut, but these should get you going. It’s important to involve your employees in these kinds of strategy sessions, as they may have their own ideas and have just as much to gain (or lose).

Don’t get caught up in all the negative hype around how bad things are. With a little ingenuity and a lot of hard work, you can make sure you always come out on top. But then again, that’s what makes you an entrepreneur, isn’t it?

Buying an existing business can be a much less risky and more quickly profitable venture than starting your own business from scratch. But it’s not entirely risk free and your success will depend heavily on how wisely you choose and evaluate the business you buy.

Here are the "tires to kick" as you begin investigating a prospective business purchase. These items are not meant to substitute for an in-depth evaluation – which you will want to conduct once you’ve gone through this first step. Click on the item below to learn more about what you should be looking at.

·         Financial statements

·         Payables and receivables

·         Employees

·         Customers

·         Location

·         Appearance of facilities

·         Competitors

·         Registration, licenses, zoning

·         Image

Financial Statements

Look at both financial statements and tax returns from the past 3-5 years to judge both the current fiscal health and financial trends. Make sure you see figures that are accompanied by an audit letter from a reputable SAIPA/CA firm. Don’t accept a simple financial review or a compilation, because those are based on figures supplied by the company. Is the business in sound financial condition? Do financial statements match tax returns? Are sales and operating ratios in line with the industry average? Your accountant can help you analyze these figures to determine the net worth of your company. benbezuidenhout@hotmail.com

Payables and receivables

Check the dates on invoices to see the business is keeping up with its bills. Normal payment times vary from industry to industry, but generally 30 to 60 days is standard. If bills are being paid 90 or more days past the invoice date, the owner may be struggling with cash flow. Also find out whether any liens have been placed against the business because of unpaid bills.

Inspect the accounts receivable with a sceptical eye; often their stated value is somewhat inflated. Take a close look at the dates on them to determine how many are delinquent and by how long. This is important because the older the receivable, the lower its value and the greater the chance that it will never be paid. While you’re at it, make a list of the business’s top ten accounts and run a credit check on them. If the majority of customers or clients are creditworthy but late to pay, you may be able to solve the problem with a more rigorous collections policy. If the clientele is financially unstable, start looking for another business.

Employees

Key personnel are an important asset to many businesses. You need to determine how critical the employees are to the success of the business. You also need to look at their work habits to determine if these are people that you can work with. How long have these key employees been with the company? Will these people remain with the company after a change of ownership? What incentives will you have to provide to get them to stay? Can any key employees be easily replaced? What are their relationships with customers, and would customers follow any of these employees if they were to leave? Also look at the role the current owner plays in the company. Is this a role you want to play? Are there any current employees who can take over those responsibilities if

Customers

These are the most important asset you may be buying with the business. Make sure they’re as solid as the other tangible assets you’ll be acquiring. Does the clientele have a special relationship with the current owner (long-time friends or relatives)? How long have these accounts been with the business and what percentage of the income do they represent? Will they leave or stay when the business passes to new hands? Does the current owner or manager seem to have good relationships with the customers? Is there a written policy for handling customer complaints, returns, disputes, etc.? Has the owner supported the local community or the industry?

Location

This is especially important if you are buying a retail business. How important is location to the success of the business? How good is the location of this particular business? Is there sufficient parking to make it easy for customers to visit? How dependent is the business on walk-in trade? What does the future hold for the area? Is it in the process of rapid change from new residential or business complexes on the way? Will the location become more or less desirable because of contemplated changes in the neighbourhood?

Appearance of facilities

The environment in which a company operates can tell you a lot about it. Take some time to eyeball the company’s physical location. How does this place look to you? Did you have a good first impression when you entered? How well is it maintained? Is there any outstanding maintenance work to be done – leaky roof, peeling paint, poor signage? Is the place well organized out front and in the back where inventory is kept?

Competitors

When you’re buying a business, you need to understand the competitive environment in which it operates. Pay attention to industry trends, and how they might affect the company you’re considering. How competitive is this industry? Who are your competitors and what are their tactics? Are price wars common in this business? How has the competitive environment changed recently? Have any competitors gone out of business? Why? You can track this information by contacting an industry association or reading trade publications.

Registrations, licenses, zoning

Make sure that key business licenses and other legal documents can be easily transferred. Determine what the process for transfer would be, and what it would cost, by contacting the proper state and local authorities. If a company is a corporation, what state is it incorporated in? Is it operating as a foreign corporation in its home state?

Image

How a company is perceived can be a serious asset or a liability that can’t be judged from a balance sheet. There are a wide range of intangibles that you need to consider when you’re evaluating a company — everything from the way it services its customers to how it answers the phones to whether or not it supports the community or the industry. This category is often referred to as "goodwill." Talk to customers, suppliers, competitors, banks, and owners of other businesses in the area to learn more about this firm’s reputation. Remember that it is very difficult to change a negative perception.

In my experience, everything worth knowing in life is simple. Why then do our teachers and the media make it so complicated?

I think there are several reasons:

• desire to keep valuable knowledge to yourself
• an agenda to mislead others so that you can profit

In my opinion, these stem from fear of scarcity (the myth that there is not enough to go around).

But perhaps the greatest reason of them all is

• ignorance

Which comes from

• flawed (conventional) education

Joseph Stiglitz, famous ex-World Bank economist, author and professor delivered a public lecture in Johannesburg on Wednesday afternoon.

In his speech, he discussed ‘asymmetric knowledge’. This means when one person in a deal knows important things that the other person doesn’t.

It played a big role in the current financial meltdown, the worst since the Great Depression. Homebuyers, pension funds and many others were seriously misled because they didn’t know what they were getting into.

If you don’t know the real story, you get preyed upon.

Like ordinary Americans were, when unscrupulous bankers offered them loans they couldn’t afford.

He also mentioned ‘embarrassing’ economic theories and models that university economic departments teach. That led to, and justified, the ‘toxic’ behavior of the bankers.

So what do I take out of this? You can’t trust bankers and you can’t trust tertiary education.

They design their courses and their products to confuse and mislead and to hide the truth.

So where do you find the truth? How do you avoid being misled?

I would recommend that you first educate yourself, with genuine knowledge that has been proven to work for years. Check your sources, check the facts, and the claims. No matter who it is – even the most respected universities, the most respected economists.

Secondly, avoid complicated explanations. If someone is trying to tell you that economics or health or wealth creation is very difficult and hard to understand, warning bells should ring.

You are being ‘confokulated’ – confused and misled.

Avoid claims that ‘the usual rules do not apply’. They said that in the dotcom bubble, and in the sub-prime bubble. Read history! Stiglitz said that economic history was no longer taught, and I think he meant in an economics course.

He said as a result nobody was aware of housing prices ever going downhill- because they did not look back far enough! This is astounding! If they’d looked at the 1980s, they would have realized their error!

Stiglitz said one of the main reasons all those people got ‘confokulated’ (my word, not his!) was because bankers and regulators and the public all believed that housing prices never drop.

The lesson? Avoid ‘confokulation’. If the truth seems very complicated, you’re being misled. Focus on educating yourself, with the real thing. Read history.

Businesses report information in the form of financial statements issued on a periodic basis. GAAP requires the following four financial statements:

Balance Sheet – statement of financial position at a given point in time.

Income Statement – revenues minus expenses for a given time period ending at a specified date.

Statement of Owner’s Equity – also known as Statement of Retained Earnings or Equity Statement.

Statement of Cash Flows – summarizes sources and uses of cash; indicates whether enough cash is available to carry on routine operations.

Balance Sheet

The balance sheet is based on the following fundamental accounting model:

Assets  =  Liabilities  +  Equity

Assets can be classed as either current assets or fixed assets. Current assets are assets that quickly and easily can be converted into cash, sometimes at a discount to the purchase price. Current assets include cash, accounts receivable, marketable securities, notes receivable, inventory, and prepaid assets such as prepaid insurance. Fixed assets include land, buildings, and equipment. Such assets are recorded at historical cost, which often is much lower than the market value.

Liabilities represent the portion of a firm’s assets that are owed to creditors. Liabilities can be classed as short-term liabilities (current) and long-term (non-current) liabilities. Current liabilities include accounts payable, notes payable, interest payable, wages payable, and taxes payable. Long-term liabilities include mortgages payable and bonds payable. The portion of a mortgage long-term bond that is due within the next 12 months is classed as a current liability, and usually is referred to as the current portion of long-term debt. The creditors of a business are the primary claimants, getting paid before the owners should the business cease to exist.

Equity is referred to as owner’s equity in a sole proprietorship or a partnership, and stockholders’ equity or shareholders’ equity in a corporation. The equity owners of a business are residual claimants, having a right to what remains only after the creditors have been paid. For a sole proprietorship or a partnership, the equity would be listed as the owner or owners’ names followed by the word "capital". For example:Sole Proprietorship:              John Doe, Capital

Partnership:       John Doe, Capital

                Josephine Smith, Capital

In the case of a corporation, equity would be listed as common stock, preferred stock, and retained earnings.

The balance sheet reports the resources of the entity. It is useful when evaluating the ability of the company to meet its long-term obligations. Comparative balance sheets are the most useful; for example, for the years ending December 31, 2000 and December 31, 2001.

Income Statement

The income statement presents the results of the entity’s operations during a period of time, such as one year. The simplest equation to describe income is:

Net Income  =  Revenue  -  Expenses

Revenue refers to inflows from the delivery or manufacture of a product or from the rendering of a service. Expenses are outflows incurred to produce revenue.

Income from operations can be separated from other forms of income. In this case, the income can be described by:

Net Income  =  Revenue  -  Expenses  +  Gains  -  Losses

where gains refer to items such as capital gains, and losses refer to capital losses, losses from natural disasters, etc.

Statement of Owners’ Equity (Statement of Retained Earnings)

The equity statement explains the changes in retained earnings. Retained earnings appear on the balance sheet and most commonly are influenced by income and dividends. The Statement of Retained Earnings therefore uses information from the Income Statement and provides information to the Balance Sheet.

The following equation describes the equity statement for a sole proprietorship:

Ending Equity  =  Beginning Equity  +  Investments  -  Withdrawals  +  Income

For a corporation, substitute "Dividends Paid" for "Withdrawals". The stockholders’ equity in a corporation is calculated as follows:    Common Stock (recorded at par value)

+  Premium on Common Stock (issue price minus par value)

+  Preferred Stock (recorded at par value)

+  Premium on Preferred Stock (issue price minus par value)

+  Retained Earnings

—————————————————————-

=  Stockholders’ Equity

Note that the premium on the issuance of stock is based on the price at which the corporation actually sold the stock on the market. Afterwards, market trading does not affect this part of the equity calculation. Stockholders’ equity does not change when the stock price changes!

Cash Flow Statement

The nature of accrual accounting is such that a company may be profitable but nonetheless experience a shortfall in cash. The statement of cash flows is useful in evaluating a company’s ability to pay its bills. For a given period, the cash flow statement provides the following information:

Sources of cash

Uses of cash

Change in cash balance

The cash flow statement represents an analysis of all of the transactions of the business, reporting where the firm obtained its cash and what it did with it. It breaks the sources and uses of cash into the following categories:

Operating activities

Investing activities

Financing activities

The information used to construct the cash flow statement comes from the beginning and ending balance sheets for the period and from the income statement for the period.

1. Remember: It’s Not About You Right Now

Force yourself to focus with laser accuracy on your company’s success, not your own. In challenging times, the last thing your employer wants is to cater to you and your fears. They want you to be a selfless, highly collaborative team player who meets and exceeds your commitments. Your presence can’t be an energy drain or create work.

2. Become a Black Belt at Change

The most important skill to develop right now is finesse at navigating change. That means flexibility and open-mindedness. Accept whatever management throws your way. If they change direction (again), shuffle the product mix, add new goals, or refine strategy on the fly, say yes to all of it. Resisting change only makes life more difficult for management and for everyone.

This also applies to those things you took for granted. Accept that your expense budget and staff have been cut. Accept that you now have more work on your plate with the same (or fewer) resources than you had a year ago.

3. Everything Is Your Job

Demonstrate your commitment to the overall success of your team and your company by taking on tasks that fall outside your job responsibilities. Pitch in on packing up the trade-show booth. Manage your own schedule/address book/travel plans. Offer to take notes and follow up after every meeting.

Nothing is beneath you. The little things you do above and beyond your job description will serve you well when it’s performance appraisal and/or downsizing time. Forget your fancy title, your impressive résumé—and your ego.

4. Walk Away from the Water Cooler

When straits are dire and headlines scary, the last thing your company needs is negative, gossipy employees who polarize colleagues into an us-vs.-them dynamic. Employers value passionate overachievers whose uplifting attitude contributes to a more energizing team culture. Whatever it takes, keep the negative mindset out of the office. This is your mantra: No complaining, no blaming! Dwell on what can be rather than what can’t.

5. "Unwritten Rules" Are Now Engraved in Stone

Show up early, stay late. Everyone notices people who leave on the dot of 5 (or before) or take very long lunches or excessive coffee/smoking breaks. Don’t get a reputation for being one of those people who takes forever to respond to an e-mail, voicemail, or a simple question. Vigilantly follow up on all assigned action items. Management is increasingly scrutinizing your every move.

6. Step Up—and Wear Very Big Shoes

Don’t wait for someone else to solve your problems. Your manager needs to hear how the organization can trim costs, manage the supply chain better, find a new client, improve processes, motivate the workforce, and deliver the next big thing.

Observe what your competitors are trying and testing, read everything relentlessly, and ask people how you can improve what you do.

Your goal here is to make sure there’d be a gaping hole if you were no longer around. Make the choice every day to do work that really matters to the success of the team and the company. Put yourself in a position that is crucial to the success of a new initiative, or dig in to solve a vexing, long-neglected problem. Maintain a bias for action in every meeting.

7. Transparency Is Your New Trump Card

You must be totally transparent as to what you’re working on and how it fits with management objectives. There can be no hiding, and no withholding information. If you don’t have enough on your plate, say it. Ask to take on more—or better yet, suggest projects you can spearhead that have killer ROI.

The more honest your superiors believe you are, the more likely they are to trust you and keep you close. Being authentic builds relationships, even more than just hard work. Stop hoping no one finds out who you are or what you really do all day. Let people in…or they’ll be showing you the door. Employers are likely to keep you around if they see you as a vital associate.

8. Make Friends in New Places

Human resources and finance are two departments that can have a significant impact on your career whether you realize it or not. They know a lot about you that can influence how you’re perceived. Respect those folks, socialize with them, ask for their advice, and make sure you carefully do a little self-promotion. When cuts need to be made, you won’t be an unknown quantity to them.

9. Start Tweeting or Start Packing

Look at the Millennials and see how they work, how they make decisions, and what technology and tools they use. No time for "I don’t do Twitter or Facebook." Acquaint yourself with social networks, mobile applications, and commerce platforms to remain relevant. Let them intimidate you and you give your boss reasons to replace you with someone younger and more in the game. Ask a family member to help, take a course, read a book…and dive in.

10. Fit Club

Healthy people tend to have better outlooks and are easier to be around. They take good care of themselves, which in turn earns them the respect of others. Fit people often set high standards for themselves both at work and at play. And they just have more stamina, so they tend not to get tired when on deadline, and they don’t call in sick as much. They have incredible endurance when others are reaching for that 10th Coke or itching to make that next trip to Starbucks. They are also calmer and more productive. So get your sleep, eat well, exercise, stay hydrated, and avoid excessive caffeine and alcohol. This is an investment that will pay dividends for you and your employer. And yes, your employer does notice.

Rate yourself. Which of these 10 areas are you excelling in, which are you doing O.K. in, and where do you need to change your behavior? The truth hurts, doesn’t it? But take the steps to make sure that it’s your career that gets rolling, rather than your head.

Once you’ve got your budget settled, you can begin to attack your existing debt with the following steps:

Pay off high-rate debt first.

 The higher your interest rate, the more you wind up paying. Begin with your highest-rate credit cards and eliminate the balance as aggressively as possible. For example, assume you have two separate $2,000 balances, one charging 20% interest, the other 8%, on which you can pay a total of 6% per month. If you were to pay 4% per month on the higher-rate card and 2% on the lower-rate card (which is typically the minimum monthly payment), you would save $961 in interest and 18 months of payments over allocating 3% to each balance.

Transfer high-rate debt to lower-rate cards. .

Consolidating credit card debts to a single, lower-rate card saves more than postage and paperwork. It also saves in interest costs over the life of the loan. Comparison shop for the best rates, and beware of "teaser" rates that start low, say, at 6%, then jump to much higher rates after the introductory period ends.

You can find a list of low-rate cards online from CardTrak at www.cardtrak.com.

If you can only find a card with a low introductory rate, maximize the value of that low-interest period. By paying off your balance aggressively, you will reduce the balance more quickly than you will when the rate goes up.

You can also contact your current credit card companies to inquire about consolidation and lower rates. Competition in the industry is fierce, and many companies are willing to lower their rates to keep their customers. Even a percentage point or two can make a difference with a sizable balance.

Borrow only for the long term.

The best use of debt is to finance things that will gain in value, such as a home, an education, or big-ticket necessities, like a washing machine or a computer, that will still be around when the debt is paid off. Avoid using your credit card for concert tickets, vacation expenses, or meals out. By the time the balance is gone, you’ll have paid far more than the cost of these items and have nothing but memories to show for it.

By analyzing your spending, controlling expenses, and establishing a plan, you can reduce — and perhaps eliminate — your debt, leaving you with more money to save today and a better outlook for your financial future.